Katonah-Lewisboro audit reveals strong controls

The Katonah-Lewisboro School District’s most recent audit found a handful of issues, but was largely positive, internal auditor David Moran of Accume Partners said last week. Mr. Moran presented the district’s internal audit at the school board meeting on Thursday, Jan. 20.

“This was a very good audit, which demonstrates strong financial controls,” Assistant Superintendent for Business Michael Jumper said.

The audit reviewed five areas highlighted by the state comptroller as frequently of concern in school districts: human resources, purchasing, claims auditing, contracts, and computer systems. The unusual scope of the audit — internal audits in the past have focused on a specific department — was the brainchild of the school board’s audit committee, but Mr. Moran said that he would probably start recommending it to other districts.

Mr. Moran said that two of the audited areas had been found to have relatively minor flaws, and therefore were classified as “needs improvement,” but that all of his firm’s recommendations had already been implemented.

“Katonah-Lewisboro has been doing a very good job maintaining their controls,” Mr. Moran said.

Flaws

In the auditors’ report, Accume recommended several changes to some of the forms that are used in the district. Requests for overtime in the facilities department should indicate the estimated number of hours, and special education consultants should be required to give a breakdown of their hours worked, rather than just a total, and those hours spent at students’ homes should be verified by parents, according to auditors.

In addition, the audit recommends that the district reinforce its pay requisition process to ensure that employees are being properly paid. While the audit found no instances of improper payments, auditors said that pay requisitions from several employees had been approved only by the payroll coordinator, and not by the human resources department. The district said that this had only happened in cases where an employee’s salary was retroactively changed, and that the payments would be reviewed by the human resources department in the future before being paid.

Improving audits

Accume Partners has been Katonah-Lewisboro’s external auditor since 2006. In that time, its evaluations — which do not examine the district’s financial strength, unlike the external auditor, but rather its controls against fraud and other areas of risk — have steadily improved.

In Accume’s first audit, which was reported in May 2008, one out of five areas was considered to have “significant issues,” and several others were considered in need of improvement, particularly in the business office, where “most business procedures [had] not been formally documented” and some office staff had not been provided adequate training. Later audits identified issues with the separation of powers between human resources and payroll, and providing proper approval of payroll. The vast majority of these issues seem to have been corrected.